business accounting questions - StudentOfFortune.com

1. Which of the following is NOT a step in the decision making? process?

a. Explore workable alternatives
b. Determine relevant cost? and revenue data
c. Consider appropriate non-financial factors
d. make a? decision

2. Which of the following is NOT a consideration when? determining whether to continue making a part or buy that part?

a. Timing? of the cash receipts and expenditures
b. Opportunity cost
c. Impact on? employees
d. Sunk cost

3. Contribution margin is calculated by? deducting:

a. variable costs from revenue
b. variable costs and? controllable fixed costs from revenue
c. variable costs and? common costs from revenue
d. fixed costs from revenue

4. A segment of? a business probably should be discontinued if:

a. its common costs exceed? its contribution margin
b. its contribution margin exceeds its controllable? fixed costs
c. it cannot produce a contribution margin
d. it has a net? loss

5. When direct costing is used, cost of goods sold? reflects:

a. both variable and fixed manufacturing costs
b. variable? manufacturing costs and variable selling and administrative expenses
c.? variable manufacturing costs only
d. fixed manufacturing costs only

6.? On an income statement prepared with a direct costing approach, the excess of? sales over the cost of goods sold, based on variable costs only, is referred to? as the:

a. marginal gross profit on sales
b. manufacturing? margin
c. marginal income on sales
d. contribution margin

7. Fixed? manufacturing costs are written off as current expenses of the period in which? they occurred when using ______ costing.

a. direct
b. standard
c.? absorption
d. differential

8. Which inventory costing system is NOT? acceptable for financial reporting purposes?

a. Absorption costing
b.? Direct costing
c. Standard costing
d. Variable costing

9. Which of? the following would NOT be relevant to a decision about whether to continue? making a part or whether to buy it from an outside supplier?

a.? Alternative uses for the plant where the part was produced if the part is? purchased
b. A fee previously spent for design of the part
c. The variable? costs of making the part
d. The number of additional employees needed to make? the part

10. A company has sales of $100,000, ending finished goods? inventory of $9,000, variable manufacturing costs of $50,000, and fixed? manufacturing costs of $28,000 for the year. Assuming the company uses direct? costing, the manufacturing margin for the year is:

a. $22,000
b.? $31,000
c. $59,000
d. $13,000

11. A segment of a business reported? a contribution margin of 436,000 and controllable fixed costs of 12,000. If the? segment had been eliminated, the company-wide net income would have? been:

A. $12,000 higher
b. $24,000 lower
c. $36,000 lower
d.? $24,000 higher

12. If a decision must be made to close a warehouse,? non-refundable prepaid rent on the warehouse is a(n) ________ cost.

a.? opportunity
b. common
c. sunk
d. variable

13. When the balance? in ending finished goods inventory increases, net income under absorption costing? is:

a. lower than under direct costing
b. higher than under direct? costing
c. the same under direct costing
d. unaffected by the? increase

14. Which of the following is the first step in the? decision-making process?

A Evaluate the cost and revenue data
b.? Identify workable alternatives
c. Define the problem
d. Consider? appropriate non financial factors

15. Which of the following is NOT a? consideration regarding a special order?

a. If the company has sufficient? capacity
b. If the special order jeopardized sales to the existing? customers
c. Federal laws regarding the price
d. Whether employees morale? would be affected.

16. Which of the following cost amounts can be found? in a firm?s accounting records?

a. Opportunity costs
b.? Differential costs
c. Incremental costs
d. Sunk costs

17. Costs? that are not directly traceable to a specific segment of a business are called? _____costs.

a. sunk
b. common
c. fixed
d. incremental

18.? Which of the following is NOT true of the direct costing procedure?

a.? Variable and fixed costs are considered as part of the cost of goods? manufactured
b. The cost of goods sold, based solely on variable costs, is? subtracted from net sales to arrive at the manufacturing margin.
c. Variable? selling expenses are deducted from the manufacturing margin
d. Variable? administrative expenses are deducted from the manufactur

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Source: http://www.studentoffortune.com/question/2028675/business-accounting-questions

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